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Republican Mississippi Senator Cindy Hyde-Smith has joined Nevada Democrat Senator Catherine Cortez Masto in co-authoring a bill to strike down the US government’s excise tax levied on all legal sports bets. The bipartisan bill seeks to cancel the current 0.25% excise tax and an annual $50 occupational tax per employee.

Although sports betting is generally popular, legislation varies by state. Nonetheless, the casino industry has evolved over time, with many states changing laws to support online casinos and gambling platforms. This evolution has also led to online casinos that support cryptocurrency payments. Players can place wagers at some of the best Bitcoin casinos available online to enjoy exciting benefits, including instant and limitless withdrawals, first-deposit bonuses over 100%, and weekly cashback on net losses, among other rewards and bonuses.

The US government introduced the 0.25% excise tax in 1951 to prosecute illegal bookmakers and operators. The law took effect when Nevada was the only state with legal sports wagering and is now seen as obsolete since sports betting is legal in 38 states.  

The Senators from Mississippi and Nevada are using the Withdrawing Arduous Gaming Excise Rates (WAGER) Act to officially combat the tax requirement, pointing out the benefits of revocation. According to Senator Hyde-Smith:

“This outdated federal excise tax on sports betting only benefits illegal offshore operations which provide zero jobs or tax revenue. By repealing this tax, our bipartisan WAGER Act will level the playing field, boost local economies, and ensure that gaming revenues stay here, supporting jobs and community investments.” 

The Senator also added that casinos and resorts in Mississippi contribute significantly to the state’s strong tourism industry and can do more for the state if the tax is permanently suspended. Reports state that between fiscal 2020 and 2021, the sports betting excise tax received by the Internal Revenue Service (IRS) spiked by about 184%, from $39 million to nearly $111 million.

The American Gaming Association (AGA) has published a statement favoring the WAGER Act. According to AGA President and CEO Bill Miller, the “antiquated” tax disadvantages legal operators and benefits illegal sportsbooks and bookmakers that do not pay taxes to state or federal authorities. Miller expressed his displeasure at the condition, considered favorable to bookmakers that do not offer users responsible gaming options or prevent underage customers.

The AGA reiterates that the tax was not intended as a source of revenue. It then adds that the tax harms business operations because sportsbooks have high operating costs and low margins. Costs AGA identified include compliance expenses, state taxes, and licensing fees.

The WAGER Act is not the first attempt to repeal the excise tax bill. Nevada’s Rep. Dina Titus had earlier co-authored a similar bill with Pennsylvania’s Guy Reschenthaler, both co-chairs of the bipartisan Congressional Gaming Caucus. Titus’ efforts have been on for a decade, since 2014 when she introduced a bill to repeal the tax. 

Reportedly, the sportsbetting excise tax collected by the US government is not used to prosecute illegal, underground, or offshore sportsbooks. According to a Review Journal report, Titus asked the IRS for the whereabouts of about $9 million Nevada paid in 2013. The report notes that the IRS could not answer the question after keeping Titus waiting for several months. 

Following the disappointing response, Titus introduced the first bill attempting to repeal the law in July 2014. Successfully revoking the tax requirement could provide more benefits to the casino sector, allow operators more income, and promote novel variations of casino gameplay, including crypto gambling.

According to figures from the US Census Bureau, legal sports betting is a growing revenue source for many states. In the third quarter of 2023, national state-level sales tax and gross receipts from sports betting hit $505.96 million, a 20.5% increase from figures recorded in Q3 of the previous year.